Squeezing the middle

WindsorStar.com – business
January 23, 2012. By Ken Lewenza, The Windsor Star

Sociologists have convincingly documented rising inequality in Canada. A lucky few – large business owners, top executives, highly specialized professionals – have captured the lion’s share of the meagre gains generated by our troubled economy. Statistics reveal the top one per cent of Canadians pocketed 31 per cent of all new income generated in 10 years. The bottom 99 per cent had to fight over the rest.

Most Canadians are guaranteed nothing by our lean, mean, globalized economy. Even university-educated specialists (like accountants or programmers) have been squeezed by new technology, and by trade rules which allow corporations to outsource any job to the lowest global bidder.

As for hourly workers, their real earnings are no higher than a quarter century ago. Given the productive potential of our skills and technology (both of which are better than ever), this constitutes an enormous economic and social failure. A healthy economy generates mass prosperity. Ours, increasingly, does not.

About the only structural protections most Canadians have going for them are public programs (like health care, education and pensions), and unions (to help equalize their power with employers). Yet these are under attack, too, from the same governments that allow (even glorify) the social irresponsibility of corporations. Governments are cutting the social wage as employers try to slash money wages. They stand by as unions fight for their lives. And they give global companies free rein to take over our resources, and our factories, with no commitments whatsoever to future Canadian interests.

So while the academics may debate the fine points of the income statistics, the overall trend is obvious: inequality is growing and the middle is being squeezed out. Companies feel no compulsion to pay living wages to their workers. And they hold all the cards at the bargaining table – including the “ace,” which is their unfettered ability to shut down and move someplace cheaper. Governments have reneged on their responsibility to protect average Canadians.

No better example for this depressing long-run trend could be found than the current dispute at the Electro-Motive facility in London, Ont. Thanks to their productivity, their high skills (including highly specialized welding and assembly techniques), and their union, Electro-Motive workers today are still proudly in the middle. They make good wages, but they’re hardly rich. They live decently, send their children to college, retire in security and enjoy good benefit programs in the event of injury or illness. Electro-Motive has a long and proud history in Canada, operating productively and profitably here for over six decades. It is Canada’s only locomotive manufacturing facility. It’s a crucial industrial asset, at a moment when governments around the world are investing massively in railway infrastructure.

Then suddenly the plant and its workers were confronted with an unprovoked and fearsome attack, after Caterpillar bought the company in 2010. Ottawa didn’t even bother reviewing the takeover, let alone attaching conditions. Immediately Caterpillar began building a second assembly plant in Indiana, where non-union workers compete for insecure, poverty-level wages.